Flexibility in supply chain management

1 Abstract preview 1 WORK IN PROGRESS PAPER Flexibility in supply chain management ABSTRACT Literature describes several developments in supply chain management . Flexibility is considered to be an important differentiator in the current market place. Several papers already emphasized the need for Flexibility although little attention is paid to how operational activities incorporate Flexibility in their supply chain practices. In this paper, emphasis is put on the dyadic buyer-supplier relationship , marketing activities and manufacturing in order to achieve Flexibility in supply chain management .

2 These aspects are illustrated with three case studies in which supply chain structures have been evaluated in two different kinds of markets. In the end, the role of Flexibility is evaluated and how this can lead to a competitive advantage. KEY WORDS Flexibility , supply chain management , Optimalisation, Efficiency AUTHORS Jarmila Kopecka, assistant professor Faculty of Industrial Design Engineering, Technical University Delft, Landbergstraat 15, 2628CE Delft, Guido Penners. Msc, Faculty of Industrial Design Engineering, Technical University Delft, Landbergstraat 15, 2628CE Delft, Prof Dr Sicco Santema Msc, Full professor B2B marketing and chain management , Faculties of Industrial Design Engineering and Aerospace Engineering, Technical University Delft, Landbergstraat 15, 2628CE Delft, corresponding author 1.

3 INTRODUCTION The role of supply chain management (SCM) has become increasingly important for firms in highly competitive (mature) markets, and we have recently seen, also in economic Ketchen & Hult (2007) describe this competitive rivalry among firms as supply chain versus supply chain instead of firms versus firms . A well-coordinated supply chain process is difficult to imitate for competitors since it becomes more difficult to compete on product level. Globalization and liberalization in the market place are important drivers for the growing competition together with the changing demand of the consumer.

4 A shift arose from a more technology-oriented view (in the past) towards a point in time where collaboration and trust become important along the partners in the supply chain . Effective management of relationships in supply chain management is a necessity in order to withstand competitive pressures and economic downturns. Therefore, Hult et. al (2004) describe that supply chain management is not anymore a support function in order to implement a business strategy; it is specifically meant to drive a firms performance and supply chain management becomes a key element of the overall strategy for the entire chain .

5 Currently, changes in the environment (socio-political, changing demand etc.) are the cause for increasing uncertainty in the market place. In order to deal with this, Flexibility in the supply chain becomes more and more important. In this paper we want to explore the term Flexibility in supply chains in order to understand the phenomenon better and be able to define specific research and managerial implications in the field. In this paper we first define a research question and describe the applied methodology. In chapter 3 we describe the results of the literature research into the phenomenon of Flexibility and in chapter 4 we describe the cases we studied.

6 The paper ends with a conclusion, implications for management of organisations, limitations of the research and suggestions for further research. Abstract preview 2 2. RESEARCH QUESTION AND METHODOLOGY This is a working paper about Flexibility in supply chains. We want to learn what is already known in the field and what spots can be defined for further research, also considering the current practices in supply chain management . We used the following research question for this paper: How can Flexibility in supply chains be defined and used in order to improve the competitiveness of the focal company ?

7 In order to find the answers to the research question, we conducted a literature study and an exploratory cases study in which we studied three different cases. In order to narrow the scope, certain business processes have been selected and how these processes have incorporated Flexibility in supply chain management . We think that literature study is necessary to put the research question in perspective of already pertained research on supply chain management en what has been concluded on Flexibility . We have taken a wide variety of literature, trying to look at the issues from a broad perspective.

8 The result of the literature research is presented in chapter 3, concluding on the term Flexibility and defining it. As from the literature research it proved that Flexibility in supply chain management has not been extensively researched before, we decided to set up an exploratory case study, with three cases. These case were randomly selected, most important reason for selection being the availability of material at the time of this work in progress research. We elaborate on this choice in the limitation section of this paper. The case study was descriptive by nature and should be followed up by a in depth, structured way, including data collection procedure, sources, interview methodology and analysis.

9 The result of the case elaboration is presented in chapter 4. 3. supply chain management Current literature about supply chain management describes several meanings of supply chain management (SCM). It becomes clear that there is not an explicit or unified description. Especially the level of detail between the descriptions differs. For example, Mabert and Venkataramanan (1998) describe supply chain management as a series of units that transform raw materials into finished products and deliver the product to the customers. This is a typical push approach, pushing the raw materials into the next processes of the chain , towards the end market.

10 A more holistic approach is given in the definition of Harland (1996) who describes supply chain management as managing business activities and relationships within an organization, with immediate suppliers, with first and second tier suppliers and customers along the supply chain . However, the descriptions of supply chain management remain vague since it is not clear what is meant by business activities . Cohen & Lee (1988) succeeded in defining a clear description of supply chain management . They clarify that supply chain management consists of both intra- and inter related business activities of a (focal) company.